Canceling an AMEX before a churn...?

Discussion in 'American Express | Membership Rewards' started by PointsNmilesAddict, Jan 22, 2013.  |  Print Topic

  1. PointsNmilesAddict

    PointsNmilesAddict Active Member

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    Ok so I had an American Express green card since 08 and today I decided to cancel because it's not really doing anything for me at just one MR per dollar and a 95 annual fee, it doesn't let me apply for the current 75k MR offer or the past 100k platinum offer which are awesome opportunities gone and it sucks!! [​IMG] i can definitely get more bang for my buck with other cards now that i discovered the awesome points and miles and churning cards business!! [​IMG] ok I'll be doing my new set of applications mid feb but it just occurred to me that maybe canceling the card close to less than a month of my next CC applications could somehow hurt my credit or show up as a negative or a reason to decline some of my next set of CCs [​IMG]. has anyone gone trough something like this? Will it hurt me that I had the 5 year old card canceled close to churning time???
     
  2. skyvan

    skyvan Gold Member

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    It can hurt a lot if it was your oldest card.
     
  3. PointsNmilesAddict

    PointsNmilesAddict Active Member

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    1. yea one of my oldest :( but it was draining me anually and i never even used it any more!! how long before it shows or how wil it affect me?
     
  4. HaveMilesWillTravel
    Original Member

    HaveMilesWillTravel Gold Member

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    How much is a lot? Are there any examples? (I realize it's likely not a fixed number of points and depends on the individual situation).
     
  5. skyvan

    skyvan Gold Member

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    With credit karma's simulator I've seen a 10 point reduction.
     
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  6. Counsellor
    Original Member

    Counsellor Gold Member

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    Well, there's nothing that will say "he just cancelled a card" and deducts points for that. What happens is that it can affect the calculation of how long your credit history runs, and that has a (small) effect on your FICO score.

    AMEX Green does not (as I recall) have a posted credit limit. If it were a card that had a posted credit limit of (say) $20,000 then cancelling it would also reduce the amount of credit you have available, which would increase the amount of available credit used.

    What I mean is this: If you have 5 cards, each with a $20K limit, and you have a total balance charged on all of them put together of $25,000, you're using 25% of your available credit -- $25K divided by the $100K available credit. Now if you cancel one of the cards, you still have the $25K balance, but as a share of only $80K available credit, so your utilization immediately bounces up to 31%. If utilization is over 20%, it hurts your FICO score significantly (so I understand).

    In this case, if you haven't been using the card and do not have a great amount charged on your other cards, it shouldn't hurt credit utilization much because the AMEX green doesn't have a stated credit limit and thus counts either as $zero or as the highest charge against that card in the last year.

    I understand why you would want to get rid of a card that had a significant annual fee if you weren't using it, but the general rule is to nurture your oldest card. In this case, you say it's "one of my oldest" so if you have another card of about the same age, cancelling this one probably didn't hurt your score much if at all.

    You might want to check the Credit Karma site (www.creditkarma.com), as skyvan says. It gives you your approximate credit score at no charge, and there are programs where you can explore hypotheticals such as "if I do this, what's the effect on my score".
     
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  7. PointsNmilesAddict

    PointsNmilesAddict Active Member

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    Great info! thanx!! i have a discover card from 07 that i won't close since there's no annual fee and a another AMEX bank of america from 05 that also has no annual fee. I feel more at ease now but will definitely check my score for changes. one more thing by nurturing do you mean use it once in awhile or just keep it open even if you don't use it at all??
     
  8. Counsellor
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    Counsellor Gold Member

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    Whatever it takes to keep it alive. Some companies cancel a card if there is no annual fee and it isn't used in a whole year. So I usually charge something (can be just a sandwich at a fast-food outlet) against my oldest card about once every 6 months just so it doesn't get cancelled.

    If you have a card that charges an annual fee and don't want to pay an annual fee, with most issuers you can call when the annual fee comes up and they'll change you into a card with no fee (probably won't get you any benefits like miles or points, though). This may not work with AMEX, since I don't think they have any "no annual fee" cards (but see below at *). If you decide to do that, ask to ensure that the "member since" date on the new card will be the same as on the card you're cancelling in order to "save" the line of credit as your oldest.

    * It's probably too late now that you've cancelled the green AMEX, but what you might have done is to apply for the AMEX HHonors (ultima) card. It has no annual fee, and they will consider the "member since" date to be the date of your oldest AMEX card, which in your case would be the green one. When you get the HHonors AMEX, check to make sure the "member since" number is the same as was on your green AMEX, then go ahead and cancel the green one when the annual fee comes due. You'll still have the HHonors AMEX and that will continue your old credit line and it doesn't charge an annual fee.
     
  9. PointsNmilesAddict

    PointsNmilesAddict Active Member

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    Ok but I still have an Amex from before the green card so I can try and do the same thing with the hilton card and requesting the member date to be the same as my oldest Amex card... Right? Or that would have only worked with the green? Note to self always ask before acting and thinking you're doing the right thing! Lesson learned!
     
  10. PointsNmilesAddict

    PointsNmilesAddict Active Member

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    * It's probably too late now that you've cancelled the green AMEX, but what you might have done is to apply for the AMEX HHonors (ultima) card. It has no annual fee, and they will consider the "member since" date to be the date of your oldest AMEX card, which in your case would be the green one. When you get the HHonors AMEX, check to make sure the "member since" number is the same as was on your green AMEX, then go ahead and cancel the green one when the annual fee comes due. You'll still have the HHonors AMEX and that will continue your old credit line and it doesn't charge an annual fee.[/quote]


    So I called AMEX and they reinstated my green card they'll just send me a new one on the mail. good thing about it is that there was no credit pull and that i'll have the same account, everything is done internally so as I was told this won't affect me in any future AMEX credit card applications! Now to get the Hilton AMEX and pass the seniority of the card to be able to cancel that green card that is just in the way of awesome AMEX UR promotions!!
     
  11. robmac

    robmac Silver Member

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    Try to do a "product change" into a no-fee Blue Card (the Membership Rewards Express one). That way, you can hold on to your MR points (yes, at a lower value), keep your AmEx history and have no annual fee.
     
  12. Counsellor
    Original Member

    Counsellor Gold Member

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    If you're talking about the "AMEX bank of america from 05" that you mention in post #7 above, I'm not sure that would work, since the no-fee HHonors AMEX is issued by AMEX, so they'd know the "member since" date of your other cards issued by AMEX, but not of the AMEX issued by Bank of America. Essentially, the switch while keeping the earlier "member since" date really only works on AMEX cards issued by AMEX.

    It's great you got the AMEX green reinstated. If you don't want to try for the no-fee AMEX HHonors card, you could take robmac's advice and switch it for the no-fee Blue Card when the fee comes up for renewal.
     
  13. PointsNmilesAddict

    PointsNmilesAddict Active Member

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    ok thanks for all the helpful info!
     

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